The internet has transformed the way consumers shop and has thus posed a threat to the direct selling industry. Asia Pacific’s rising affluence and huge millennial population presents companies with opportunities for growth, especially in emerging Asia. Direct selling players that are quick to adapt in terms of product innovation and embracing omnichannel strategies will continue to stay relevant.
Direct selling has been hit by slow growth in recent years due to growing competition from e-commerce players. The convenience and anonymity of making online purchases has weighed down on direct selling growth. Plagued with several financing frauds and pyramid selling scams, the industry has faced increased scrutiny from regulators and growing distrust among consumers.
Out of all product categories, consumer health and beauty and personal care are the top products that are driving growth in the region. Besides the greater propensity to spend by Asia Pacific’s burgeoning middle-class, consumers are also paying greater attention to their health and beauty. Weight management, vitamins and natural ingredient-infused skin care products are some of the products that are gaining traction among consumers.
Direct sellers are making inroads into emerging markets, especially the lower-tier cities of China, India and Indonesia. Given the low presence of physical shops and a less educated population, the nature of the direct selling business resonates well with this consumer segment. Consumers appreciate the ability to receive personalised advice for health and beauty products directly from sales personnel.
Given the threat of e-commerce, direct sellers will need to reinvent the shopping experience by embracing multichannel. Several players in China have recently established a physical presence and are committed to providing customers with a unique and immersive retail experience.
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